Indian eCommerce yet to catch up with the U.S. blitzkrieg
By Anonya Roy, SiliconIndia   |   Monday, 29 November 2010, 21:47 IST   |    1 Comments
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Bangalore: The world looks up to U.S. and India in many aspects, from conducting business to technological innovations. The two countries contribute majorly to the world economy. So it is interesting to note that there is a vast difference between the two economies and the way trade and commerce happens in India and the U.S. eCommerce, the business of buying and selling products and services over the Internet, has grown insurmountably the world over due to widespread Internet usage. eCommerce is touted to be the sales channel of the future and hence holds a prime spot in the economies of countries like U.S. or India. Although the two countries realize the vast potential of eCommerce, there is a huge distinction between them when it comes to conducting business online. In the U.S., the holiday season (the November-December period) spells boom in the eCommerce market. This year, the period starting in November through Christmas Eve is set to fetch nearly $32.4 billion as online shopping revenue, a growth of 11 percent as compared to last year's four percent in the same time period. The thriving phase of holiday season in the U.S. sees shoppers go all out and splurge. The businesses catch on this trend and introduce many deals and promotions, discounts and sales. When the deal is made through online, some include free shipping option also. This is a huge bonus to the shoppers giving them vast money saving option. In India, the scenario is a little different. Indian shoppers have been conservative in terms of opening up to shopping online. There are usual fears of online security and buyers hesitating to buy products that they have not touched, felt or seen. Then there is the case of low internet penetration in the Indian geography. However, there seems to be a change in all that and the eCommerce in India is poised for a growth. There are 81 million internet users in India with the number touching 180-200 million by 2015. Plus with 3G services arriving in the country, the problem of low broadband penetration is taken care of. The security aspect is dealt with the introduction of cash-on delivery payment option. Customers in India are slowly realizing the importance of buying things online. Also dealers and retailers are making sweet proposals to grab the eyeballs of the customer looking to buy products online. Customers have the option of buying high value items through EMIs and can pay for the low value items upon delivery. The eCommerce strategies are now incorporating the social media as well, thereby leveraging the reach to customers. As per a report by Caris & Company, the eCommerce market in India is about 630 crore and will reach 2,250 crore by 2012. The dealers should take a cue from their counterparts in the U.S. and introduce such attractive offers in India during the festive season to cash on the sales like in the U.S. India has a large customer base and eCommerce has robust growth prospects here just like in the U.S. The things that will propel eCommerce in India include uniform broadband distribution, reliable transportation to ensure timely product delivery and a fair sales tax law providing level playing field to all Internet retailers. With these factors in place, India's eCommerce sector has a bright future.